MECON Insurance Pty Ltd
TERMS AND CONDITIONS OF TRADE

Effective date: 12th September 2017

These Terms and Conditions of Trade (‘Terms and Conditions’) apply to financial services business between MECON Insurance Pty Ltd (“MECON”) and any AFS Licensed Insurance Broker (‘Broker’) from and including the Effective Date.  These Terms and Conditions of Trade shall replace any prior or existing service agreement between MECON Insurance Pty Ltd and any AFS Licensed Insurance Broker (“Broker”).

Any Broker wishing to advise on and deal in insurance products provided by MECON agrees to be bound by these Terms and Conditions.

1. Background

The Broker wishes to carry on a financial services business to provide financial product advice for insurance products, and deal in a financial product by applying for, acquiring, varying or disposing of an insurance product provided by MECON subject to the Broker’s Australian Financial Services Licence (‘AFSL’) authorisations. The Broker agrees to be bound by these Terms and Conditions. In consideration of the Remuneration (set out at section 8 below) from MECON, the Broker agrees to advise and deal in an insurance product provided by MECON.


2. Relationship

The Broker holds an AFSL that authorises it to advise and deal in insurance products to either retail or wholesale clients (or both). The Broker will advise MECON immediately if the AFSL is varied, suspended or cancelled.

The Broker acts as agent for its clients and is not an agent of MECON nor do these Terms and Conditions create any form of binder, employment, joint venture or partnership. The Broker will not provide or purport to provide any financial services on behalf of MECON. The Broker is also responsible for the actions and omissions of its authorised representatives, agents, employees and contractors. MECON acts as agent for insurers, unless otherwise advised.


3. Arranging Insurance – Closings and Hold Covered

The Broker must accept the offer for the contract of insurance in writing prior to or on the inception date and provide MECON with all proposal forms (where applicable) and closing instructions received from the insured within 14 days from the inception date of the contract of insurance, unless written instructions have been provided by MECON advising of an alternate timeframe.

The contract of insurance will be as per the written offer provided by MECON and any subsequent documents or other conduct including any counter-offer from the Broker will have no effect unless confirmed in writing by MECON.

Hold covered terms may be available in limited circumstances upon written request and at the sole discretion of MECON.


4. Financial Services Guide (‘FSG’)

For retail products distributed by MECON, where there is no combined FSG/PDS for the insurance product, the Broker must issue the relevant FSG on behalf of MECON to the Broker’s client.


5. Insureds

MECON will only directly contact insureds in the following circumstances:

  • Promoting, marketing and selling its services or products to the general public or to groups of persons who are members of a specific industry, association, profession, club or ethnic community provided that in doing so it does not target any client of the Broker specifically;
  • Pursuant to statutory requirements;
  • If requested by the insured in writing;
  • As required in relation to a claim; or
  • If following reasonable efforts, MECON has been unable to provide the Broker with any of the relevant notices and information required pursuant to statutory requirements.

6. Duty of Disclosure

The insured has a duty of disclosure under the Insurance Contracts Act 1984 (Cth) (‘ICA’). The relevant sections of the ICA, subject to the general insurance product, are sections 21, 21A and 21B. The relevant duty of disclosure is also set out in any product disclosure statement (PDS), the policy wording or insurance documentation associated with the contract of insurance.


7. Payment of Premium, Fees and Statutory Charges

The Broker will remit premium on a net of commission basis and any applicable fees and statutory charges on a gross basis to MECON within 90 days of the contract of insurance’s inception date. All collected premium, applicable fees and statutory charges are to be held in a trust account in accordance with statutory provisions.


8. Cancellation of the Contract of Insurance

MECON, on behalf of the insurer, may have the right to cancel the contract of insurance if premium is not paid in accordance with the terms of the contract of insurance.

MECON may otherwise cancel a contract of insurance at any time as allowed by law by providing 14 days’ written notice. In this case MECON will refund the unexpired portion of the premium.

The insured may cancel a contract of insurance at any time by notifying MECON in writing, in which case:

  • cancellation takes place when the notice is received; and
  • MECON, on behalf of the insurer, will retain or be entitled to retain the premium for the period during which the policy was in force together with any non-refundable government taxes, levies and duties.

If a contract of insurance is cancelled following the cooling off period (if applicable), the premium refund will be made up of two components:

(i) a prorated percentage of the net premium received by MECON; and
(ii) a prorated percentage of commission earned by the Broker for arranging the contract of insurance.

Note: Any fees charged by MECON are non-refundable unless the contract of insurance is cancelled within the cooling off period (if applicable) or is a full term cancellation. A cancellation fee may apply.

Interim Contracts of Insurance

An interim contract of insurance will be cancelled in the following circumstances:

  • the time when insurance cover commences under another contract of insurance issued by MECON or otherwise, being insurance cover that is intended to replace the insurance cover provided by the interim contract of insurance;
  • the time when the interim contract of insurance is cancelled; or
  • if the proposal is withdrawn, the time of the withdrawal.

9. Cancellation of the Contract of Insurance

MECON, on behalf of the insurer, will have the right to cancel the contract of insurance if premium is not paid in accordance with the terms of the contract of insurance and these Terms and Conditions.

Any interim contracts of insurance will be cancelled in accordance with sections 38 and 60(4) of the ICA.

Any instalment contracts of insurance will be cancelled in accordance with section 62 of the ICA.

Subject to the terms of the contract of insurance, MECON maintains any other rights under the ICA to cancel the contract of insurance. MECON must notify the Broker of any intention to cancel or avoid a contract of insurance.

If a contract of insurance is cancelled following the cooling off period (if applicable), and subject to any policy stipulations, the premium refund will be made up of two components:

i. a prorated percentage of the net premium received by MECON; and
ii. a prorated percentage of commission earned by the Broker for arranging the contract of insurance.

Note: Fees are non-refundable unless the contract of insurance is cancelled within the cooling off period (if applicable) or is a full term cancellation.


10. Claims

The Broker will provide all reasonable assistance to MECON, or a party nominated by MECON or the insurer, in respect of all claims and agrees that any claim will only be met upon receipt by the Broker of all outstanding premium and other fees and statutory charges for that contract of insurance.


11. Electronic Distribution

If the Broker chooses to distribute insurance documentation via electronic means, the Broker must comply with any ASIC regulatory guides and any statutory requirements.


12. Marketing Material

Any marketing material for MECON’s products created or developed by the Broker must be approved by MECON. Also, the Broker will not change any marketing material provided by MECON without the prior written consent of MECON.


13. Compliance with Applicable Requirements

The Broker will at all times comply with all statutory requirements, ASIC regulatory guides and codes of conduct affecting the Broker’s business


14. Indemnity

Each party indemnifies the other, on demand, for all claims, damages, judgments, losses, costs (party/party basis) and expenses to the extent that they are reasonably incurred in connection with any breach by a party of either these Terms and Conditions or statutory requirements. The indemnity survives the expiry or termination of these Terms and Conditions.


15. GST

Where GST is payable, it must be calculated and paid in accordance with A New Tax System (Goods and Services Tax) Act 1999 (Cth). All amounts referred to in these Terms and Conditions are GST exclusive.


16. Recipient Created Tax Invoice (‘RCTI’)

Both parties agree that they are parties to a RCTI Agreement for the purpose of dealing in insurance products and declare that these Terms and Conditions apply to supplies to which a tax invoice relates. MECON may issue tax invoices for the supplies, in which case the Broker will not issue tax invoices for the supplies. Both parties are registered for GST and will notify the other if the registration ceases. Both parties agree to comply with the Australian Taxation Office requirements for a valid RCTI, which may be amended from time to time.


17. Records

The Broker will retain all records including correspondence (whether electronic or otherwise) either created by or supplied to the Broker for the purpose of providing financial product advice or dealing with the insurance products under these Terms and Conditions for a minimum of seven years or longer if required by any statutory requirements.


18. Dispute Resolution

The parties will attempt in good faith to negotiate any dispute between them in connection with these Terms and Conditions within 30 days after written notice from a party. If the parties cannot resolve the dispute by negotiation within 30 days from the original written notice, they will mediate in accordance with the Australian Disputes Centre guidelines for commercial mediation then in operation. This clause does not apply to any urgent court application, including interlocutory relief.


19. Privacy and Confidentiality

Privacy
The Broker, if providing MECON with personal information about individuals, will comply with all relevant obligations under the Privacy Act 1988 (Cth), including having made or making the individual(s) aware that their personal information will be disclosed to MECON and handled in accordance with MECON’s Privacy Policy

Confidentiality
Subject to section 5 (Insureds), during and after termination of these Terms and Conditions, each party must keep confidential and must not use the other party’s Confidential Information except as necessary to perform under these Terms and Conditions or as required by law.

If a government, regulatory authority or court orders a party to disclose Confidential Information, that party will, to the extent permitted, immediately advise the other party and will disclose only such of the Confidential Information necessary to comply with the order.

Nothing in this section 19 (Privacy & Confidentiality) restricts the use or dissemination of Confidential Information obtained lawfully from a third party.

Each party authorises the other to disclose its Confidential Information to its insurers, (re)insurers, actuaries, auditors, professional advisors, data warehouses and consultants, processors, investigators, loss assessors adjustors and any related bodies corporate. It is acknowledged that some of these people could be located overseas.

This section 19 survives termination.

Confidential Information means all information, data, practices and techniques relating to a party, or a related body corporate, customers, competitors, business, operations, strategies, computer systems, marketing systems and intellectual property or other property of which the other party becomes aware in negotiating or performing under these Terms and Conditions.

Confidential Information does not include information that is in the public domain or later comes into the public domain (unless it came into the public domain by a breach of confidentiality).


20. Termination and Variation

These Terms and Conditions may be varied by MECON without cause by providing the Broker with 30 days’ written notice, unless the variation is to comply with a statutory requirement where immediate notice will apply. Further, these Terms and Conditions may be terminated without cause by either party by providing 30 days’ written notice to the other or immediately if a party has its AFSL varied, suspended or cancelled. MECON reserves the right to terminate these Terms and Conditions immediately by providing written notice to the Broker if the Broker is subject to an insolvency event, breaches a condition or engages in serious misconduct including fraudulent activity, or there is a statutory requirement. As soon as practicable after any termination of these Terms and Conditions and in any event within 90 days, each party must pay all money owed to the other if any, after taking into account any adjustments required and the Broker must return at its own expense all documents including marketing materials supplied by MECON.

Contact Details
A party will provide notice to the other of any change of address, telephone and facsimile numbers and e-mail address as soon as practicable after such change.


21. Inconsistency and No Assignment

In the event of any inconsistency between these Terms and Conditions and the PDS, policy wording or insurance documentation associated with the contract of insurance, the PDS, policy wording or insurance documentation will take precedence.

The Broker may not assign its rights or transfer obligations under these Terms and Conditions without the prior written consent of MECON.


22. Governing Law

These Terms and Conditions will be governed by the laws of New South Wales and the parties irrevocably submit unconditionally to the non-exclusive jurisdiction of the Courts of New South Wales and any courts which may hear appeals from those Courts.